Opportunity cost is what is given up when a scarce resource is used in a certain way. It is possible for a person to incur an opportunity cost without spending money. While money is a scarce resource, there are other scarce resources that don’t involve money.
For example, time is a scarce resource. When a person has a limited amount of time and needs to do many things, a person will incur an opportunity cost when he or she chooses to use time in a given away. Let’s say a person has one free hour in a given evening. The person has a homework assignment that will take an hour to complete. This person also has an opportunity to visit a sick relative in a nursing home. This visit will last an hour. If the person decides to visit the sick relative, the opportunity cost will be not being able to do the homework assignment.
It is possible to incur an opportunity cost in situations unrelated to spending money.
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